For the past three months, Tom Aikens has probably been the most despised chef in London. Ever since he went bust in October, leaving his 160 suppliers - mostly small family firms - almost £1 million out of pocket, they have been calling for his head, branding the Michelin-star restaurateur "despicable", "dishonourable" and "lacking in integrity".

It's not just that his business collapsed - threatening suppliers' livelihoods with individual unpaid debts of up to £83,000 - that angers them. Quite a few restaurants have failed lately. Only yesterday television chef Antony Worrall Thompson announced that he is to close one of his gastropubs in Berkshire because of the credit crunch, and the FishWorks chain failed last week. Rather their indignation arises from the fact that through a sleight of hand - in which Aikens's business was put into administration but immediately sold back to him and a couple of venture capitalists - he was able to continue trading legally while instantly jettisoning all £3 million of his debts.

His two Chelsea restaurants, Tom Aikens and Tom's Kitchen, never closed. Not even for a day. Until now the 38-year-old Michelin-starred chef has kept a low profile, perhaps understandably, but today he has chosen to explain why he was forced, as he puts it, to "shaft his creditors" and how he fought to save his business.

"This has been a humiliation for me," he says, speaking in the private dining room of his flagship restaurant where the minimum spend is £100 a head. "For months I could hardly look at myself in the mirror. I feel like a complete sh**bag for what I have done to my suppliers and I completely understand their anger. I've had quite a few pitch up at my restaurant, shouting: 'When are you going to pay me my f***ing money?' Half the time I think they're going to hit me. I've had to take them outside and try to talk to them and calm them down."

What does he tell them? He looks away and shrugs gingerly. "That I tried desperately to save the business but after Lehman Brothers collapsed, nobody would re-finance me. That this was the least-worst option because at least it means my staff still have jobs. And that however much they lost, I lost too - around £500,000 of my original investment and in solicitor's fees, despite working 18-hour days for the past five years.

"I can't alter the fact that I took my eye off the ball and that my failure has cost them, yet 80 per cent have decided to continue to supply me, initially for cash, but increasingly on credit. We're building trust again."

But some anger against Aikens rises from his refusal to stump up more of his own money to prop up his failing business. His wife is heiress Amber Nuttall, daughter of the late Sir Nicholas Nuttall and whose mother, Miranda Quarry, was once married to Peter Sellers and is now the wife of the Earl of Stockton, heir to the Macmillan fortune. By Tom's admission, all he needed was a £600,000 cash injection. Surely a man of his connections could have raised it if he'd wanted to?

"Contrary to what people believe, I don't have the capital," he says. "I have a flat in Battersea worth £600,000 funded by a £300,000 mortgage and that's it."

Amber, 32, his second wife whom he married 18 months ago, has popped in to give her husband support and now weighs in. "People think that because my father died recently, I must have inherited a fortune. But the truth is that he had four wives and five children and I was left no money - nothing at all - by my father. It's a private and painful matter but the reason I bring it up is to stop this gossip that Tom could have done more. He couldn't."

Tom's fall from grace was as sudden as it was precipitous. Just a year ago he was riding high as his Tom Aikens restaurant, which he opened in 2003, won accolade after accolade. In 2004, the year it was first awarded a Michelin star, it won ITV London Restaurant of the Year and the Tatler Restaurant of the Year and in 2005 it was rated the eighth best restaurant in the world. It was the place to be seen: Kate Middleton had her birthday there, Hugh Grant was a regular, and on a Friday night you could get a table only if you booked five weeks in advance. What's more, his brasserie, Tom's Kitchen, which he opened in 2006, was doing a roaring trade.

It all seemed to be going well but a third Chelsea restaurant he opened in February last year, an upmarket fish and chip restaurant called Tom's Place, was struggling and on 31 July Aikens dropped a bombshell. As Amber recalls: "We were supposed to be flying to Shanghai for a two-week working holiday but instead of ordering the taxi, Tom came home, grey-faced, and said: 'We're not going. We're in really big trouble.' I had no idea what he was talking about. It turned out that he'd been battling to raise finance for months and had been too afraid to tell me in case I buggered off and left him."

This was not the first time Tom, the son of a Norfolk wine merchant, had found himself in trouble. Back in 1996, at 26, he was the youngest British chef to hold two Michelin stars when he was appointed head chef of Pied a Terre, but he got himself fired three years later after infamously branding a trainee chef on the hand with a hot palette knife. He shakes his head. "Back then I was an obnoxious little sh** who would shout and scream and refuse to delegate in the kitchen. After I got fired, I learned to stop being such an arrogant arsehole."

This time, he admits though, his failure was of a different magnitude in that it affected more people than just him. He says his problem was "bad project management" which caused the opening of Tom's Place to be delayed six months, and his set-up costs to spiral from £450,00 to £900,000. "The problem was threefold: our extractor plant was noisy and smelly and local residents complained; we failed to put in air-conditioning which meant the place was like a sauna in the summer; and our prices were too high. At first, we did well but then we nose-dived. Also, I had entered into a contract to supply ready-meals to Selfridges which ended up racking up £500,000 of losses."

By August last year, Tom had cut his ties with Selfridges and closed Tom's Place but the accumulated losses had sucked up his cashflow and he was unable to meet his tax bills of £500,000. He approached PricewaterhouseCoopers for advice and they said that unless he raised £600,000 within weeks, the only option was administration.

"At first I refused to accept administration," says Aikens. "To me it meant losing everything I'd worked so f***ing hard for in the last 20 years and my reputation going up in smoke. It felt like a bereavement. I was determined to find backers to re-finance, but in mid-September Lehman Brothers collapsed."

He shakes his head. "For weeks I was walking around feeling nauseous with fear and worry. I couldn't eat, I lost half a stone. Amber and I drew up a list of names of everyone we knew and we approached over 100 family and friends to bail us out. It was shameless cold calling. Awful really. We were practically begging. Three times we came close to getting backers but each time they stepped away at the last moment."

With time running out and nobody willing to help, they were introduced, he says, to old friends of Amber's family, venture capitalists David Till and Peter Dubens. "Our backs were to the wall. It became clear that the only way we could save the company was by opting for a pre-packed administration."

A pre-pack is also known as a "phoenix" because it enables the business to be dissolved and then rise again from its own ashes. In Tom's case, it meant his two restaurants being sold for an undisclosed sum to a new holding company, TA Holdco, owned by Till and Dubens, with Aikens a minority shareholder of around 15 per cent. For the chef, the pre-pack was a reprieve, but his creditors, apart from the banks whose debts of £172,000 were secured, wouldn't get a penny.

For some the losses were so great they had to lay off staff. Leslie Ironman, the managing director of Southbank Fresh Fish, who was owed £8,000 says: "The way it was done to smaller suppliers was enough not just to put them out of business but put them out of their home. We certainly won't be doing business with Tom Aikens again." Others said that although he'd done nothing illegal, it was immoral.

What does Aikens say? "I've tried to be up-front with my suppliers. I called every one of them and explained the situation. Many were extremely angry. I would have been, too."

I remind him of the story that was all over the newspapers back in 2004 when he indignantly accused a guest in this very private dining room of stealing an £11 steel spatula. "The irony is not lost on me," he says. "I was pissed off that people were taking something they hadn't paid for and here I am, having taken raw produce from suppliers that I never paid for."

Having had his name dragged through the gutter, he is determined to move forward and says he is beginning to feel rejuvenated and optimistic about the future again. His restaurants are profitable, he says, even though lunch times are "dead right now" and bookings down by about 40 per cent on last January.

With at least four well-known Soho restaurants said to be on the brink of going bust, how does he plan to survive the recession? Will he cut prices like other Michelin-star chefs (such as Joel Robuchon) are doing? "We've introduced a two-course lunch for £23 which is a bloody bargain but otherwise I don't believe discounting is the answer," he says. "My plan is to put my nose to the grindstone. There is no margin for error. I've had my nine lives. This time I've got to get it right."

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